Question
Steve (age 40) and Edie (age 39) Brady are married. Steve works as a retail manager and Edie is a self-employed architect but does not
Steve (age 40) and Edie (age 39) Brady are married. Steve works as a retail manager and Edie is a self-employed architect but does not maintain a home office. She does NOT qualify for the Qualified Business Income (QBI) deduction. Their 2019 tax and other information are as follows:
Salary Steve | 70,000 |
Federal withholding on salary | 10,000 |
State withholding on salary | 4,000 |
Interest income on municipal bonds: |
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State of Connecticut | 1,000 |
Savings account interest | 1,500 |
Dividends from RGR, Inc. (all are non-qualified) | 2,500 |
Value of employer provided medical insurance | 3,000 |
Inheritance from Steves fathers estate | 9,000 |
Interest paid on personal car loan | 1,800 |
Interest paid on personal loan | 1,100 |
Child support paid to Steves ex-wife | 10,000 |
Alimony paid to Steves ex-wife divorced in 2010 | 8,000 |
Qualified Out of Pocket Medical Expenses | 3,700 |
Donations to church Real Estate taxes on primary residence | 2,200 6,000 |
Mortgage interest on primary residence (<$1M) | 4,000 |
Edies business revenues | 58,000 |
Edies business expenses | 25,000 |
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Required: Using the tax formula format, determine the following for the Bradys 2019 tax year (show all calculations):
- All Income $___________
- Exclusions (if any) $ ___________
- Gross income (including Edies SE income) $ ___________
- Deductions For AGI $ ___________
- Adjusted gross income $ ___________
- Itemized deduction or standard deduction amount $ ___________
- Deduction for exemptions $ ___________
- Taxable income $ ___________
- Income tax liability $ ___________
- Self-employment tax liability $ ___________
- Net tax due or refund (show calculation) $ ___________
Remember: This is for the 2019 tax year. You must use appropriate 2019 amounts for standard deduction, exemptions, and tax calculations.
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